Wednesday, May 22 2019

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Construction ministry proposes stricter regulations on apartment maintenance fund

Update: April, 27/2019 - 11:08
The Ministry of Construction (MoC) has called for the prosecution of individuals and organisations that misappropriate apartment maintenance funds.— Photo thanhnien.vn

HÀ NỘI — The Ministry of Construction (MoC) has called for the prosecution of individuals and organisations that misappropriate apartment maintenance funds.

The ministry said disputes and complaints about apartment maintenance funds have been a hot button issue in recent years.

Minister Phạm Hồng Hà said that by the end of last month, 11 of 40 localities reporting disputes and complaints were related to the fund. Of which, most of them were in Hà Nội and HCM City with 458 disputes and complaints.

The disputes were related to management and the use of the fund as investors delayed the hand-over of cash or provided only part to the management board.

Hà said the problem was some investors did not have sufficient financial capacity to implement property projects. They only focused on profit from selling their apartments but did not pay attention to after-sale duties. They did not open a bank account to manage funds but used the money for their business or building of other projects.

“Many real estate investors delayed establishing a management board representing apartments’ owners or did not hand over the fund to the board,” he said.

He added that collecting 2 per cent for apartment maintenance fees from each apartment was not a small amount. This was why the Government should strictly control the use of the fund to avoid problems.

Nguyễn Trọng Ninh, head of the ministry’s Department of Housing Management and Real Estate Market, said the MoC proposed the National Assembly complete policies relating to apartment maintenance fund management.

The ministry proposed three plans relating to the fund.

The first is to maintain the current collection of 2 per cent from each apartment and pay after buying an apartment.

The second is to remove the contribution and investors would collect money from apartment owners to repair damage.

The last is to collect the fee five years after an apartment building comes into operation, as apartment buildings often have five years of guarantee and did not need the funds.

“The ministry is inclined to the third plan because the collection of maintenance fees in this way is the most reasonable,” Ninh added.

Trần Trọng Tuấn, director of HCM City’s Department of Construction, said they proposed a model that having a third party to collect and keep the funds such as a bank or a business. Home buyers would pay the fee to a third party.

The third party would disburse the funds if apartment management board follows procedures and regulations.

Lê Hoàng Châu, chairman of HCM City Real Estate Association proposed another plan by dividing the collection of 2 per cent of maintenance fees into 60 months to reduce the financial burden for home buyers.

The management board of each apartment building would collect the fees and propose to the ministry a mechanism for disbursement. — VNS

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